So A Blogger Walks Into A Bar… • Hacker News Board

Re: So A Blogger Walks Into A Bar…

#231

Post by grellas » Wed, Sep 22, 2010, 1:02 PM UTC

EvanMiller wrote: post #162

grellas wrote: post #130

I am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired…

"3. Parallel action by competitors is in itself normally quite harmless and does not subject them to liabilities." Not sure what your sources are, but courts have ruled that parallel action can be sufficient evidence of conspiracy under Section 2 of the Sherman Act. See e.g. American Tobacco v. United States (1946), available here: http://supreme.vlex.com/vid/american-tobacco-v-united-states... The Supreme Court wrot…

Concerted action can take as many forms as human imagination and ingenuity permit and does not require a formal agreement. And parallel action, coupled with other evidence of collusion (e.g., secret meetings or other suspicious conduct) can be the basis of an antitrust violation.

That said, normally, the mere fact of parallel action is not problematic unless there is more to show suspicious activities. The venture financing industry has many customs and patterns of long-standing, and its participants will happen to conform to them for a variety of reasons having nothing to do with collusion aimed at suppressing competition.

Re: So A Blogger Walks Into A Bar…

#232

Post by charlief » Wed, Sep 22, 2010, 1:03 PM UTC

fdeth wrote: post #75

Screwing over entrepreneurs on the seed stage is just evil. Gordon-Gekko-evil.

Impeccable timing, Wallstreet 2 comes out in 2 days

Re: So A Blogger Walks Into A Bar…

#233

Post by lefstathiou » Wed, Sep 22, 2010, 1:07 PM UTC

It's moments like these that I deeply, humbly and profoundly love and appreciate the internet and everything and everyone that makes it work.

Re: So A Blogger Walks Into A Bar…

#234

Post by khafra » Wed, Sep 22, 2010, 1:13 PM UTC

Eliezer wrote: post #216

guelo wrote: post #111

Earlier quoted context omitted.

I'm guessing the top 10 super angels would include Marc Andreessen, Chris Dixon, Ron Conway and the PayPal guys Peter Thiel, Reid Hoffman, Max Levchin, Keith Rabois Who else?

The Quora list is very different from yours. And I think we should all be really careful about guessing, considering how much damage you could do to someone's reputation by guessing wrongly. There's at least one person on your list above who I'd be surprised to see part of this. Vide the cognitive psychology experiments which show that once you mention a person's name, it gets connected in memory regardless of how do…

Thiel seems like a clear thinker, but almost anybody can gradually drift in the wrong direction--especially if, as grellas says above, it probably wasn't quite illegal.

Re: So A Blogger Walks Into A Bar…

#235

Post by grellas » Wed, Sep 22, 2010, 1:20 PM UTC

jon_dahl wrote: post #134

grellas wrote: post #130

I am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired…

Grellas, would there have to be evidence that the participants were acting anti-competitively, or is being in the room enough? Arrington says that a few of the folks there were uncomfortable with what was going on, and were maybe there just to see what was happening.

Assuming the meeting had an illegal purpose (which is a major assumption at this point), one might infer that anyone present was complicit in that illegal purpose. In my view, that by itself would not normally be enough to subject someone to liability, especially if the participant disclaims affiliation with the group and thereafter does not act in concert with it.

Re: So A Blogger Walks Into A Bar…

#236

Post by jacquesm » Wed, Sep 22, 2010, 1:26 PM UTC

See http://news.ycombinator.com/item?id=1715840 for Dave McClure's (one of those present) response to these allegations.

Re: So A Blogger Walks Into A Bar…

#237

Post by ThePlague » Wed, Sep 22, 2010, 1:34 PM UTC

Issues of price fixing by a group of investors tease at the difference between "mainstream conservative" and "libertarian". A "mainstream conservative" will probably want to have laws in place against price-fixing schemes which can hurt the small business owner/entrepreneur type person because small business is integral to economic stability/growth for the mainstream conservative (like a Jack Kemp, etc.). A hard-core libertarian (Ayn Rand, for instance) would be opposed to any regulations even those against practices which could hurt the entrepreneur. Because whereas in a "conservative ecosystem" the majority of hiring, etc. comes from small business/"main street" or whatever, in a "libertarian/John Galt ecosystem" most of the hiring is done by, you guessed it, John Galt. My point is, a mainstream conservative (a more moderate type) has an interest in preventing price-fixing and helping the small-time businessman whereas the libertarian does not. Therefore, "pro-business" means different things to different people. Pro-small-business (mainstream or moderate conservatism) is different or not always the same at any rate from being pro-big-business (libertarian/Objectivist). Thus, for example Gov. Romney would probably want to keep a lid on price-fixing which hurts mainstreet, while say Rand Paul would not. This is a great topic to tease out the nuances between various so-called "pro-business" or "conservative" viewpoints. Who's right? Who knows, but it is certainly instructive.

Re: So A Blogger Walks Into A Bar…

#238

Post by messel » Wed, Sep 22, 2010, 2:00 PM UTC

grellas wrote: post #130

I am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired…

The only observation I've read is that several angels in a bar didn't want to talk to Mike Arrington about why they were meeting. New fund, maybe. Shared problems about Silicon Valley deal flow and seed price inflation, likely.

Collusion is a bit of a jump, and suggests far more market power than a roomful of angels can have over state, regional, national, or global startup macro pricing trends.

Re: So A Blogger Walks Into A Bar…

#239

Post by grellas » Wed, Sep 22, 2010, 2:43 PM UTC

SkyMarshal wrote: post #202

grellas wrote: post #130

I am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired…

Grellas, what's your take on this Quora comment? In a nutshell, it's not illegal for collusion on the buy side, only the sell side: Tarun Nimmagadda, Mutual Mobile Co-Founder, COO http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A... "The article was a fun read, but it is a false claim that this is illegal. Collusion, price fixing, and dividing markets is only illegal on the selling side. Think about how pe…

That comment was made out of ignorance. Antitrust laws are by no means limited to sellers only.

Re: So A Blogger Walks Into A Bar…

#240

Post by grellas » Wed, Sep 22, 2010, 3:51 PM UTC

guelo wrote: post #187

grellas wrote: post #130

I am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired…

Does it matter if the participants have monopoly power over the market? I have a hard time believing Arrington's claim that "ten or so" angels control "nearly 100% of early stage startup deals in Silicon Valley". If they control lets say only 50% of this market would it still be illegal collusion?

It is not required that the participants have monopoly power for them to transgress the law on this point. I agree with you that the "nearly 100% of the early stage deals in Silicon Valley" statement is wildly overstated but this should not affect the fundamental legal analysis here.